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ISLAMABAD: The Supreme Court on Friday settled a contractual dispute spanning more than two decades, holding that the Trading Corporation of Pakistan (TCP) was justified in forfeiting a performance guarantee after a trading company failed to deliver urea despite receiving multiple extensions.
Headed by Chief Justice of Pakistan (CJP) Yahya Afridi, a three-judge SC bench disposed of cross-appeals filed by TCP and M/s Abdullah Mezroei Metal Trading Company against a Nov 24, 2015 Sindh High Court (SHC) judgment arising from a 2005 contract for the import of 50,000 metric tonnes of urea.
The SC ruled that TCP’s forfeiture of the entire performance guarantee was justified and reasonable in the circumstances of the case. It also held that the trading company was not entitled to recover damages of $3.465 million, or any other amount, from TCP.
The court set aside the SHC judgments directing the refund of the performance guarantee, while upholding the rejection of the trading company’s claim for damages. As a result, the company’s appeal was dismissed.
